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ANYA SCHMEMANN (task force program director, Council on Foreign Relations): Thank you all for being here. I'm Anya Schmemann. I'm director of the council's task force program. And it's my great pleasure to welcome you this morning to a special event to present the report of the Independent Task Force on U.S. Education Reform and National Security. I hope that you have all received a copy or picked one up outside.

This task force was chaired by Condoleezza Rice and Joel Klein. And while Dr. Rice was unable to participate this morning, we're very pleased to be joined by Mr. Klein and also task force member former Secretary of Education Margaret Spellings. Thank you for joining us.

This project was directed by Julia Levy, here in our front row, who served as the primary author of the report.

Let me say a few very quick words about CFR task forces before we turn to our discussion. CFR task forces address the major foreign policy issues and provide analysis and recommendations for policymakers and others. Task forces are nonpartisan and independent. CFR takes no institutional positions on issues, and task force members are alone responsible for the content of their reports. And each member participates in his or her own individual capacity. Task force reports are consensus documents, meaning that members endorse the general policy thrust and the judgments reached by the group, though not necessarily every finding or recommendation. You will see at the back of the report that some members have submitted additional or dissenting views. And we do commend those to you. They are interesting and help to define the parameters of these debates.

Lastly, this task force is part of CFR's Renewing America initiative, which examines the domestic underpinnings of U.S. global power. CFR has also launched a number of education initiatives, and you'll be hearing a bit more about those in the weeks and months to come. Task force members are listed on the back of the report, and several of them have joined us here today. And we thank you for your participation. Of course, many others were instrumental in this effort. So I thank all of those at CFR and elsewhere who have helped. We would also like to thank the Broad Foundation for their support for this project.

And now I'm pleased to turn it to John Meacham, who will lead us in a discussion. And thank you all.

JON MEACHAM: Thank you.

Chancellor, Madam Secretary, it's a good morning when you can use those titles before 8:15. (Laughter.)

MARGARET SPELLINGS: Barely.

JOEL KLEIN: Especially when they're no longer ours. (Laughter.)

SPELLINGS: Yeah, exactly.

MEACHAM: There you go. Even better.

SPELLINGS: They're bogus.

MEACHAM: Well, that's better for you.

SPELLINGS: Yeah.

MEACHAM: Madam Secretary, tell us, where do we stand right now globally? And when did that trendline begin, where the -- where we are now?

SPELLINGS: Well, we are too far below the lead. We're about 17th place in language and about in the mid-20s in math. I mean, obviously, these things are recalibrated. But we're way down the pack. We trail folks like, obviously, Finland, the famous Finland -- (laughter) -- Singapore, folks like that that you might expect, but others that you wouldn't expect. And so we have a lot of work to do.

Now, I mean, in Texas, we would say we're pleased, but not satisfied. We were talking about this before we got up here. And that is to say that we -- you know, the last couple of decades since "A Nation at Risk," we've really started to get a little more serious about it. This is the whole standards and accountability and measurement movement.

So I think that has led us to a place and time where we really clearly understand the problem in very much more specific ways. We know which schools work and which don't, which teachers are good and which are not so good, which kids are performing and which aren't. And so, you know, the first thing you have to do before you start to cure a problem is to figure out exactly, you know, what it is.

And so, you know, we've made some progress, but we're still, you know, woefully falling short of where we need to be.

MEACHAM: When did this begin? When did -- was there a high-water mark from whence we have fallen? Or what's the -- what's the historical story?

KLEIN: So I think probably the problem started to intensify around "A Nation at Risk." And if you look at -- there's a book called "The Race Between Education and Technology" by a couple of Harvard economists. And they document that in the first 80 years of the 20th century, our technology advancement and our educational attainment kept pace, and the growth rate was 3 1/2 percent. And you know, you saw that in the first half of the 20th century where uniquely, America committed that everybody would graduate from high school -- didn't happen, but you know, we had a -- after the second world war, obviously, college-going and the GI bill and stuff like that.

And so you saw this enormous growth in the education of our citizenry. And that continued through the '80s. From 1980 to 2010, basically, our educational attainment has been about half of our technological advancement. And that's opening up a widening gap. What people don't understand is if we stay in place, even if we kept at the rates of the 1980s, we would be rapidly falling behind. And why is that? Because of the technological advancement and the globalization of the economy.

When I started school in this city in 1950 -- which to some people, the young people, seem like a long time ago; to me, I assure you, it's not that long ago -- when I started in 1950 -- think about this -- 60 percent --

MEACHAM: The Dutch had just left. (Laughter.)

KLEIN: I have only one rule when I participate in panels: It's the panelists, not the moderator, who make the jokes. (Laughter.) Don't screw around, Meacham. Really, it's too early in the morning for that.

So -- but when you think about that, in 1950 60 percent of America's workforce were high school dropouts, 60 percent. Today that number is 6 percent and declining. In today's market, even where there are jobs, kids without a high school diploma or kids even with a high school diploma are not getting those jobs because they don't have the requisite skill set.

And so this global problem -- it's not just a league tabled problem for America. What it is is a problem in people not having the requisite skills to do the jobs.

And as the report documents -- and most people didn't really wrap their head around it, and frankly, I hadn't had my head around it when I was chancellor -- that today in America, three-quarters of our kids are simply ineligible for the military. More than half of those kids are ineligible simply because they don't have the requisite academic performance levels, I mean, even kids who are graduating high school.

Now, you know, that, in and of -- or whatever you think about, you know, sort of the challenges we face, it's a startling statistic. And when you think about -- if you disaggregated this, as Margaret and her people have really focused in, whatever else you think about the issues we face, it was huge in America that we disaggregated by race and poverty educational performance, because we also came to the conclusion that -- massively underperforming groups of Hispanics and African-Americans in the country.

So we've got an overall problem, and then we have got what we call these achievement gap problems, both of which, I think, have significant national security implications.

MEACHAM: You talk about the -- how it's -- you -- Joel mentioned the military -- the preparedness for people to take the military test. What are the other manifestations, in terms of defense and --

SPELLINGS: Well, for starters, we don't have nearly enough people who are capable in the STEM fields, science, technology, engineering and math, and continue -- as Joel said, it's not a matter of just staying even or catching up; it's a matter of leaping ahead. And so, you know, when we think about what the modern world of defense and technology and cyber everything means, you know, the fact that we don't have people who are capable to do this work is, you know, scary.

Likewise, we don't have people who know and understand foreign languages and other cultures. You know, on any given day, there are, you know, hundreds of vacancies for people who speak Pashtu and Arabic and Mandarin and on and on. And so, you know, I think those are a couple of examples of how it really manifests itself.

KLEIN: But I actually think the greatest threat to our national security -- I think these are obviously important things, and I know -- when Secretary Rice and I agreed to do this, we were both animated by the following concern, and you see this being played out in America. In most of our history -- our national security depends upon a nation that has a shared vision for its future, a sense of what Bill Clinton used to say, which was, you know, in America, if you play by the rules, you have a real chance to -- you know, work hard, play by the rules, you have a chance to live the American dream. You know, that really is the glue that's held this together. We don't have a shared religion. We don't have the kind of common history that a lot of European countries have. And people have come here from all over. And as Secretary Rice always says, in America, it's not where you come from; it's where you're going to.

See, now, that's unraveling now. And the gap between the haves and the have-nots, as we've all seen, is widening. The sense of social mobility that dominated, you know, that animated the lives of so many generations of immigrants -- that is declining dramatically. And more and more, I think we have -- whatever you think of the discussion between, you know, the tea party and the Occupy Wall Street, the one thing you see on both ends is increasing belief that the American game isn't working, that it's rigged, and the American dream is going to become the American memory on our watch.

That, I think, is the greatest challenge to our national security, the notion that we will become inward-looking, this notion of envy that's starting to permeate our discussion, this sense that you won't -- your kids' lives won't be better than your lives. And that, to me, will erode America's confidence. That will make us inward-focused. That will make us more divided. For the first in my life, I begin to think the things that divide this country are beginning to exceed the things that unite this country. And I only know of one fix. I mean, I think we need right safety nets and all that. But the best cure for poverty I know is education. And we have got to get that game working because if people don't have that game, I don't think there's a plan B.

SPELLINGS: And I think the people now understand that, you know, poor minority people in this country are being grossly underserved. If you're a Hispanic or African-American in this country, you have a, you know, you -- you're -- have about a 50 percent chance of getting out of high school on time. Even those that do get out at time are unprepared for work or for college.

And you know, this idea that education is the way out, it's a lie for many, many people. And so we have got to get a lot more serious about it than we are. You know, I mean, if I had asked anybody -- the No Child Left Behind, this law that's on the books today says, gets -- get kids on grade level -- P.S., pretty low standards -- within 12 years -- and, you know, to read and cipher, basic levels of reading and math. And if I asked any person in this room when you want your kid or your grandkid on grade level, you'd say right now today, when they're in the grade. But the idea that we think that black and brown parents want something less for their kids than we want for ours is just ridiculous and wrong. And so that's what I think this report really calls out and in particular this issue of kind of our moral fabric and getting really serious about it.

And it's not -- I mean, obviously, disadvantaged kids are most impacted. But Joel's right: Even at the high end -- and we're sort fat, dumb and happy -- our suburban kids -- in fact, there's some new data out -- suggests that, you know, even in Beverly Hills and in Princeton and, you know, the -- Scarsdale and, you know, any affluent community you can think of, those kids don't perform very well compared to their peers around the world either.

MEACHAM: To what extent is this a -- you're very eloquent about the general crisis. To what extent are we putting a disproportionate weight on the educational system to address what is a larger, more pervasive cultural problem?

SPELLINGS: I -- I'm -- I give Joel a speech all the time. So I guess I should just -- you know --

KLEIN (?): Go ahead. Give them --

SPELLINGS: -- (laughs) -- do it again. But I'll start.

KLEIN: You do it so much better.

SPELLINGS: You know, this idea -- as I used to say, you know, parents send the best kids they have to schools. (Laughter.) And this idea that we're going to -- I know I did, right? -- you did --

KLEIN: Right, right.

SPELLINGS: -- that, you know, we're going to sort of blame the family, blame the parents -- I mean, we've been doing that for a long time -- the "put the money out and hope for the best" sort of deal. And you know, kind of, so what? I mean, we're -- that's -- that -- those are the kids that are our citizens and our countrymen and our future workforce and, rather than bemoan their situation, we need to get about the cure. And the very best cure -- this is the Joel Klein part -- is, you know, the game changer that education can be if we get it right.

It's where kids are congregated. It's where families can look. It's where resources are provided. So, you know, it's the one -- I think if there is a silver bullet, you know, it's as close as there is to one.

KLEIN: So, you know, look, I don't -- I don't want to get into a falsely dichotomized view of the world -- in other words, that education is the only thing that matters -- although I used to say -- and I still believe -- you know, when I took this job, a lot of people, friends who were here in the room, used to say, you know, Joel, you're never going to fix education in America till you fix poverty in America. And I always used to say, that's a 180 degrees wrong. We're never going to fix poverty in America till we fix education in America. But there are a lot of things we could be doing, in addition to fixing education, that matter.

So if you study some of the work that Geoff Canada and the Harlem Children Zone are doing, where you're really starting to get families engaged, literally, while mothers are pregnant: building pre-K and early childhood, appropriate prenatal care, family supports -- all of those (things ?). I mean, you have to address a range of issues. But, in the end, if you did all of that and in fact didn't give kids a good education, you'd fail. And if you didn't do all of that and you gave kids a good education, you'd still have a real shot, and we know that. And that's what so terribly important about it.

And I just want to give you a thought experiment, because I -- nobody has ever answered this question differently; but it helps focus the thinking, because, I mean, if you believe in the American dream, you got to believe in equal educational opportunity. You know, if you want to have a bigger car or a boat or whatever -- some of these people in the room have a plane, whatever -- God bless you, I mean really -- (laughter) -- it's not my thing, I don't care -- but if you really want to believe in a country that believes in the American dream, you got to give every kid an equal educational opportunity.

Now, is there anybody in this room who would allow me randomly to assign your kid to a public school in New York City? Is there anybody here who'd say, "I'm down with that; you can assign my kid to any school you'd like"? So -- you would. All right. Well, that's --

QUESTIONER: (Off mic) -- my kids went to public -- (off mic).

KLEIN: No, but to ANY school. I didn't say to A school. I think -- there are lots of schools I would send my kids to in this city -- there are great schools -- but not to any school. Nobody I know -- I mean, I had a discussion with Warren Buffett -- nobody I know would send their kid to any school.

And so whose kids go to the schools that we wouldn't send our kids to, right?

So look, if you live on the East Side not far from here, you want to go to P.S. 6 or 290 or something, sure, great. But would you send your kid to a school in a high-poverty community in this city? And the answer is no.

Now whose kids goes (sic) to those schools? Kids who have no choices in life. The kids for whom it's one and done. The kids who have the greatest need for education end up in those environments, and we wouldn't send our kids there.

So by definition, those kids are not getting an equal shot. And unless we're prepared to address those issues, then I think we're paying lip service to the notion that, you know, you work hard, you play by the rules, you can get ahead, because kids with the most challenged families are almost disproportionately -- not almost, but disproportionately getting the least good education in the country. And when you're 0 for 2, troubles at home and troubles in school, it's awfully hard to find the building blocks necessary to get ahead.

SPELLINGS: Well, and you know, there are some obvious and seemingly simple things that can cure a lot of that. We have a lot of research that tells us that a -- an excellent teacher can make a huge difference. The way our system works now is that if you have a lot of experience and a Ph.D., you're at Cream Puff High in suburbia. If you are very challenged, brand-new, struggling, you are sent to the least -- the most challenging educational settings, often. And so we do it exactly backwards. And we have to start being serious about how we spend time and how we allocate people.

And if we -- if we really got serious about really educating every single poor minority kid and what it took -- resources, staff, time -- we could do it. But we're not serious yet.

MEACHAM: What are the recommendations that the task force agreed on that you all find most compelling?

SPELLINGS: Mr. Chairman?

KLEIN: So I would say that there are three -- the good thing about this is we didn't do a laundry list. And you know, we had a diverse committee, and there are some dissenting views in there and, I think, made the report actually richer, so that people could see what the various plus and minuses are.

But I think, starting from the beginning, the view that certainly the secretary had and Secretary Rice and I had and the members of the task force -- we were trying to think -- we weren't going to just tinker, right? And we also weren't going to come up with a list of what a lot of reports do -- here's 180 recommendations. You know, any report that has 180 recommendations? Forget about it.

So we focused on -- well, you know, the world doesn't work that way. So we tried to focus on what we thought were three related and different concepts.

The first, which is one that Margaret and others have been instrumental in pushing -- Arne Duncan -- and there's a lot of bipartisan support for, is really de facto national standards. Now, because of the all of the issues of states' rights and everything, it's come about through the governors in a common core set of standards. And I think there was virtually universal support by the 30 people on the task force for the notion that we really need to define what it means to be an educated American.

One of the most shocking statistics -- a member of our task force sitting here in the front row, Gaston Caperton, from the College Board -- and they do analyses all the time that show even among the almost three-quarters of our kids who graduate high school -- a significant portion, half of those kids, at least, are not ready for college. I mean, it's -- we're playing a game. We're giving them a degree that isn't worth the paper it's printed on.

And so we've got to elevate standards, know what it means to be educated and not dumb them down.

So that was a core part of the discussion, what it means to be an educated -- and countries that succeed oftentimes have fully articulated national standards.

Now the joke in Washington used to be -- and Margaret and others have said -- you know, America will never have national standards; the Republicans won't do national, the Democrats won't do standards. I get it. (Laughter.) But through the common core, I think we can get there. They're not perfect, but they're a whole lot better.

And they go to what I think we need to change, which is a lot of the learning processes, what it means to be able to be a problem solver, to be a higher order thinker and so forth. And we need to have tests and assessments that are aligned with that, and the federal government has now got two private consortia working on that. So that's point number one.

Number two, which was the most controversial part of the report but I think is critical, is the whole notion of choice. And I'll come back to that.

And number three was a kind of national readiness audit, to look at these things and make the country in disaggregated form. And it builds on concepts that was bipartisan, which I think was really a remarkable achievement; George Bush, Ted Kennedy and Miller came together --

SPELLINGS: And Boehner.

KLEIN: And Boehner.

SPELLINGS: Don't forget.

KLEIN: That's right. (Laughter.) And they -- you know, this whole notion, which is what I was saying before about disaggregated data, STEM data so we know where we are in terms of producing people with the requisite skills, et cetera, instead of college readiness and so on.

But the thing about choice is, again, a powerful and important issue because we thought that's a way to really facilitate change is to create systems of choice. And you're seeing -- actually, ironically, I think because of Katrina, the tragedy of Katrina, you're seeing for the first time a true choice system down in New Orleans that's starting to get significantly different results and holds out optimism.

But at least for me, there's such a powerful equity notion in the fact that everyone I know insists on choice for his or her children. If there's a great school nearby -- like I said, P.S. 6 -- people are happy with that; they go there. If not, they decide to move; they decide to put their kid in private school; they insist on choice. The people with the greatest needs don't have choice. And I think that will stimulate two things: some real competition in the system, and I think competition can fuel improvement; and I hope it will stimulate innovation.

One of the those maddening things about K to 12 education is how utterly noninnovative it is, how Wizard of Oz we believe it is to change it. Somebody called a superintendent or a chancellor -- and my colleague who is here from Charlotte-Mecklenburg did this brilliantly, Pete Gorman, when he was down there -- somebody called the chancellor here in New York who's responsible for 1,5(00) or 1,600 schools. And you're supposed to figure out how to operate those schools with some kind of template from central headquarters. In fact, the thing that works greatest in our economy is really innovation through the decentralization of power. And I think that will fuel the kind of innovation and differentiation.

And you're starting to see that in a city like New York. We have a model that we developed with IBM which is enormously promising. And it's a nine-to-14 model in which kids literally end up with a high school diploma, an associate's degree and certificated by IBM as a technician and offered a job right out of school by IBM. Lots of kids apply to that program. It's an entirely different model.

But we need to start thinking about these different models. Couple of weeks ago David Brooks had a piece on a thing called The New American Academy: four teachers, from a master teacher down to an apprentice teacher, responsible for 60 kids from kindergarten through the fifth grade working together as a team. Is it a perfect model? I don't know. Should we try new and different approaches? You're damn right we should.

SPELLINGS: So if I could just add a couple of things to that, I think, you know, the choice -- these two things are simple and profound, the choice, the -- you know, vote with your feet kind of dimension here, as we have in almost every other area of American life, and the power of the marketplace around the common core.

One of the reasons I think that we've not had innovation in our schools is it's so difficult to sell and distribute, you know, high-quality techniques or technologies or strategies or professional development or whatever. If you're got to do it thousands of times over again -- and that's why we have a lot of consolidation in that industry and, you know, people with giant marketing schemes -- but you know, the Sal Khans of the world, the Khan Academy and other things like that, are going to be advantaged when there is a singular, you know, set of expectations around the country that we're all going to execute to and we can distribute against. And so we're going to get the speedometer right, as I sometimes like to say, but we also need to speed up. And the way we're going to foment more speeding up, in my view, is choice.

I think Joel gave a little bit of short shrift to the national readiness audit. This is the part of the work that is about creating a sense of urgency. I mean, if Joel and I had a nickel for every panel we'd be on -- well, you are a millionaire, so anyway -- (laughter) -- never mind. The analogy fell apart.

But the point -- (laughter) --

KLEIN: I don't know, really -- why did I get up early this morning?

SPELLINGS: Yeah. It was in stereo.

MEACHAM: You've been called old and rich.

SPELLINGS: Yeah, so -- (laughter) -- beats the alternative.

KLEIN: I've been called a lot worse things than that (in these ?) -- (laughter) --

SPELLINGS: But anyway, the point is, you know, we continue to kind of, you know, raise the flag about this stuff, and nobody seems to give a damn. I mean, if half the lunches served in schools' cafeterias today were tainted and the kids were violently ill, we would be on fire. But you know, the idea that half of our people are being wasted is just somehow not compelling to folks.

And I'm not talking about the people in this room. I'm talking about your next-door neighbor and your daughter-in-law and your grandchild. And I mean, we've got to get serious not only for our own kids, but for other people because -- (inaudible).

KLEIN: I mean, we're having a presidential election right now, and you don't even hear about this issue, right? Of all the issues this country is facing, I am certain that this has the greatest long-term significance. It's -- a massively undereducated country is not going to be competitive; it's not going to be cohesive; it's going to have all these divisive issues. And yet, you know, we're not focused on -- we're not talking about -- I did an op-ed in The Washington Post on this, and I think, in the entire set of Republican debates, fewer than 1 percent of the discussion focused on education, which is really extraordinary.

MEACHAM: Let me ask you --

SPELLINGS: And may I say, thank God, because what they'd say is the wrong thing! (Laughter.) And I mean -- and I know from personal experience, you know? Which is "local" -- it's all this -- these red herring kind of nonissues. It's all about the -- you know, who decides and kind of chattering and nothing about the "getting it done," you know?

MEACHAM: Let me ask you, before we go to questions, about curriculum content, civics education. It's the Council on Foreign Relations; this was a Council on Foreign Relations Task Force. You all have both talked about preparing people for the broader world. What -- to what extent should there be a global literacy set of standards that you have to pass -- a hundred questions, on what's a Sunni, what's a Shia -- before you graduate?

SPELLINGS: I don't think that's going to work on my side -- (laughs) -- of the aisle. We've got our work cut out for us on the -- on the Common Core at the moment and particularly when we get into cultural issues, and -- you know, you all haven't been to the hearings on creationism at the Texas State Board of Education. (Laughter.) But it's eye-opening, and I don't think they're ready for something like that, honestly.

And so part of this is about the -- (laughter) -- this is about the body politic, people. We gotta --

MEACHAM (?): Point -- points for candor.

SPELLINGS: -- bring the folks with us too, you know?

MEACHAM (?): Yeah.

SPELLINGS: So -- (we got a few ?) -- but --

MEACHAM: But you can -- you can -- you can -- from the -- from East 68th Street, you can recommend that people think about curricular content presumably.

SPELLINGS: OK, knock yourself out.

KLEIN: I'd honestly -- I'd go further. I think that's got to be -- we gotta expand the Common Core. I don't think it's even just global literacy, although I know Richard Haass, who really I want to thank for putting this task force together in the council. But I know one of the things that animated him -- and he had talked to me a lot about (it ?) when I was chancellor -- was the whole issue of global literacy. But even contemporary civics, I mean, even U.S. literacy -- it's shocking to me how many kids really don't understand tripartite government, don't understand core issues of federalism, so on and so forth.

SPELLINGS: Can't read. (Laughs.)

KLEIN: Can't read. But even those who read are ill-prepared in fundamental civics, and one of the things the report calls out is really to focus on civics and global literacy and stuff like that. One of the changes that I hope the Common Core effectuates -- and this goes to the whole reading thing -- is what I used to call too much self-referential learning.

SPELLINGS: (Chuckles.)

KLEIN: So I walked in the classroom -- this is a true story -- so the first question was, what was the Civil War about? Slavery. Second question was, what was slavery about? Racism. Third question, has anybody recently experienced racism? And we're off to the races. (Laughter.) Now, it seems to me important to understand a little more about the Civil War before we start talking about ourselves.

And that whole process of engaging people -- and as much as I think skills development is critical, I think knowledge acquisition is -- and you know, this whole notion that the kids gotta sort of memorize things -- but learning a little bit about American history. And so (what an ?) amazing question -- I used to ask this all the time -- why did Lincoln start the Gettysburg Address from "Four score and seven years ago"? People said, what the hell is four score and seven -- what does that mean, you know? And virtually no one knew the connection to the Declaration and why he chose the Declaration rather than the Constitution, et cetera.

And so I went and found a textbook by a leading publisher. You know what they said in this textbook? Read the Gettysburg Address, and answer the following question. What's the question? It said, Lincoln talks about a government of the people, by the people, et cetera. He said, have you or anybody you know recently had an encounter with a government of the people, by the people? (Laughter.) And if so, write Lincoln a letter about this. By definition, you don't have to read the Gettysburg Address to understand it.

MEACHAM: Yeah.

KLEIN: And one of the things I love about the Common Core is the real effort to insist that our kids actually read and learn and master complex texts. And I think it goes to your point. I mean, how do you live in a world today where you don't know about the Sunni and the Shia and understand the global context? And I think we've got to really challenge our kids.

I'll tell you, if you go to other countries, their global literacy is significantly higher overall.

SPELLINGS: But -- I don't want to be the skunk at the garden party on this, because I agree with you, obviously, and that's where we need to get to -- but you know, getting a common core around reading and math, which is what we aim to do, through 50 state policy processes -- legislative, boards of education, local school boards, teacher training, teacher licensure, new books, new assessments -- is a huge, huge lift. And it's going to take everybody in this room fighting hard for that sort of thing.

And so I mean, I don't want the perfect to be the enemy of the good as we do this. The wheels are coming off in places around the country already --

KLEIN: Right.

SPELLINGS: -- and from Massachusetts to Texas and, you know, everywhere in between. And so, you know, I think reading and math is a great place to start.

MEACHAM: OK.

KLEIN: That I agree with, and I would say science should be third.

SPELLINGS: Amen.

KLEIN: All right.

MEACHAM: I'd like to ask members to join in with questions at this point, if you'd wait for the microphone and then state your name and affiliation. And Mr. Cox, why don't we start with you?

QUESTIONER: Ed Cox, New York State Republican Party. As you know, Joel, I supervised the authorization of one-half the charter schools in New York state for 10 years as a trustee of the state university. I get school choice. I get standards. But perhaps the most important thing is the teacher in the classroom. And the state university system is atrocious for training teachers, attracts the lowest SAT scores. It focuses on boring pedagogy.

I get Teach for America, which -- that works as a system. But how do you improve -- how do you change that process for attracting the best people into the teaching profession? Which I think a lot of other countries do and accounts for their better systems of education.

KLEIN: You want to take that?

SPELLINGS: Start and I'll --

KLEIN: Yeah, no -- first of all, Ed, it's good of you -- people don't know this -- Ed and I were in law school together, and the first time I ever met a Secret Service person was at our graduation -- (laughter) -- because I'd sat at the table with his Secret Service people. So I've always been grateful for him -- for that. (Laughter.)

Look, I think there -- this is a complicated question, but you're right to focus in -- and there's an important study by McKinsey on this -- that the countries that do best in K to 12 education are drawing their teachers from the top quarter or in some countries even, like Finland, the top 10 percent of their college graduates. And that's not what we're doing here in America.

So the whole question of how we attract, educate, et cetera, is going to be a critical issue. I think we have to move teaching from a trade union model to a professional model, where we reward excellence, where things like tenure and seniority are not the driving forces, and I think that will attract different people into the profession. And I think that's going to happen. I think that the use of technology will change the way we teach in the next decade -- people were talking about SALCON -- and I think we'll think differently about the mix of human and technological capital that we have in the process.

But the whole ed school issue, which Arne Duncan and Margaret and others have talked about -- really they've got to set, I think, much more rigorous, much more demanding criteria. And they have got to also understand that content knowledge matters. So it's not just teaching pedagogy, but people who teach math really need to understand math much more deeply, et cetera.

And I think one of the things I would go to -- to just stir the controversy, I think we ought to have much more demanding testing and licensure for people to enter into the teaching profession. And I think that would then influence the requirements that you have for ed schools.

But it just strikes me -- is that every secretary of every different party has spoken about the fact that our ed schools are not remotely rigorous enough to the tasks they face. And you see it now -- you know, they're trying to do this teacher -- ed school evaluation project, and the ed schools are predictably up in arms because they don't want to be evaluated. And as in any evaluation system, they'll complain about this metric or that.

SPELLINGS: And we need to get our pay systems aligned around all of that, obviously. We need to have differentiated pay for people who are doing the most challenging work or people who teaching in high-need subject areas, et cetera.

The other thing -- and this really is radical -- we need to stop thinking about teaching as the only way we want you in our classrooms are if you're ready to come for a 185- or a 190-day school year and teach in this way, you know, under this set of circumstances. We could not run American higher education, as you know, without adjuncts, with people who come for the spring semester but not the fall; who teach, you know, two sections of chemistry and next semester, physics.

I mean, this idea that we have all this human capital, this talent -- we need to employ kind of adjunct models. Yes, we need to have rigorous processes to make sure these kids (sic) are capable of being in front of kids, but we limit the talent pool to, you know, bottom quartile of SAT scores, et cetera, when lots of people in this -- in this country, I think, would sign up and say, you know, I'll go do that; I'm taking a sabbatical this fall and whatever. And we need to welcome people in and out of the profession, as Teach for America has done to some success.

The other model, I just want to say -- within the structures, there's a program called YouTeach. Yes, it was developed at the University of Texas, but it's all over the place, and you -- all of those of you who've watched the Masters -- probably many of you were at the Masters -- last Sunday, you know, all of the commercials are all about ExxonMobil and their commitment to this. They use this YouTeach model, which is a student is first and foremost a history or math major or whatever their subject area expertise, and then they sprinkle on the pedagogy, not the other way around.

QUESTIONER: Steven Blank (sp). As the impact of the fiscal crisis has filtered down to the state and municipal level, I at least, and probably you too, have been shocked by the attack on educational spending: reduced number of days in school -- in school years, reduced number of days in school weeks, attack on all sorts of institutional arrangements. It seems that this is a significant countertrend to the trend you are trying to push and develop. How does this happen? How did we get to this point?

SPELLINGS: Well, I want to -- I want to start here because this is -- I think this is the next big thing in education and policy, and that is to say that while we've done a good job of figuring out, you know, kind of how the kids are doing, we have no idea how we use resources. How much does it cost to teach science versus physics? How much is the third grade versus the 11th grade? How much is Ms. Jones versus Ms. Smith? We don't have systems that can tell us that.

So when we say things like that -- and I don't necessarily dispute the fact that we are maybe or maybe not under-resourced in our schools -- how much does it cost? We have no idea. And for what? And we can't really do a very good job of evaluating, when it comes time to constrict, you know, where -- what are the smartest ways to do that, because we just don't have those sorts of information.

So we need accountability systems, the next big thing that says, you know, here's resource allocation, and here's performance of the institution around the outcomes, and let's get those knitted together like any other enterprise would do, except for higher ed.

KLEIN: I agree with Margaret's saying, and I also agree with what you're saying. I do think, though, this is part of a larger problem that the country has got to address, which is the whole issue of intergenerational equity. And so, you know, when you face problems in the economy, it's a lot easier to cut things like education because the impact is delayed. It's certainly going to happen, but it's going to be delayed, whereas the same thing we see now, our generation, in terms of a lot of the programs that we have, are really we're just borrowing money from our kids. And we ought to be investing money in our kids, not borrowing money from our kids.

And to me, the greatest of these concerns is what's happening in lots of states, the dismantling of the state university system, which was really a flagship American institution. And one of the things I worry about enormously is whether we're going to price these -- postsecondary education out of the market for kids who don't come out of affluent families. This is a genuine, genuine concern. The model is broken, and the state universities are increasingly -- if you go to places like California, which had great state -- they're completely under pressure right now and are going to have to rethink how we do business.

MEACHAM: What do you find the willingness in higher education is to think about something as radical as, say, a three-year bachelor's degree?

SPELLINGS: Some have talked about that. You know, the -- it's -- it makes K-12 look like an adaptable system, honestly.

MEACHAM: (Chuckles.) All right.

SPELLINGS: And so, you know -- (chuckles) -- I don't look for them to take a leadership role in that. I think what we're going to see in the private sector is -- and Joel talked about it with IBM -- are badges and competency-based programs like the Western Governors University was -- is a nonprofit organization that was founded by western governors. And Indiana and Texas and others have adopted statewide online university systems that are competency-based that are very affordable and that are primarily technology-based.

So I think we're going to see more self-paced education come via technology, and frankly, you know, outside of the academy. That's why the for-profit institutions have flourished, because people can take things a la carte at their own convenience and manage education in that way.

KLEIN: It's got to happen. I mean, as Margaret said, the most resistant in that area -- but it's got to happen. This for-profit thing even is very interesting. Lots of people want to take things online now, people who are 35 and have a job, but they want to increase their skills and so forth. We've got to create models that are responsive.

And as I say, I mean, one of the most shocking numbers is that of our top 200 most competitive universities, about 60 percent, 70 percent of those kids are coming from the top quartile of the income distribution. It's just not a winning formula. So we have to develop these new models.

The other thing which we haven't talked about, which is just -- we've got to think very differently about the career readiness. You know, Margaret and Arne and all these people talk about we got to be college- or career-ready. I don't think a hundred percent of our kids are going to four-year colleges. But we've got to start to think very differently about the whole vocational career, technical education piece like the IBM piece, like they do in Singapore, like they do in Denmark and so forth. And we have basically created a bad name for vocational education because we track the kids who are not, quote, you know, smart enough to do the other work -- put them into vocational. But we've got to really create a robust set of offering (sic) for career technical education.

MEACHAM: Yes, sir, over here.

QUESTIONER: Joel, I'm going to speculate for a minute that if New York had an elected school board, it neither would have gone to you to be chancellor, nor would you have accepted the job. (Laughter.) And I think one of the major problems in the country that seemingly never gets addressed in these kind of studies is the fact that all these good ideas, which are now quite well-known and quite well-agreed-upon, can't be implemented because of the political system that runs our public schools across the country. Do you have any thoughts on how that can be addressed or should be addressed?

KLEIN: I -- you know, I think it's a great question. And I agree with you. I mean, Lou Gerstner, who's on the task force, has been banging on about this for years now, about if you organized anything the way we organize the K-12 school system with some 16,000 school districts or something like that out there and some of them, you know, with three schools, and some of them with -- what -- it just -- crazy. And it is amateur hour in terms of the politics of it and everything like that, and totally paralytic.

So it seems to me you're right. How do you crack this? This goes to a much larger political discussion in America. We now live in a world in which the specialist (sic) interests are going to triumph time and again. That's the way the politics, the economics of the politics -- it's over -- and there's only one way to reverse that: The rest of us have got to really get engaged in these kind of issues, so -- and take them on.

You know, the mayor was down yesterday -- it just strikes me -- so how do we have the gun control laws that we have in the country? Why do we have massive intergenerational transfer of wealth? We all notice it going on. We're leaving our kids with debts that they're not going to be able to absorb. Why do we -- because special interests control our political process. And it's no different in education.

And the only way those things change is if people of good will say that even though this is not my number one priority, I'm going to make it. People always ask me, what should I talk to legislators and other people about? Don't talk about tax abatement. Don't talk about pollution. Talk first and foremost about transforming education. And that's the only way I know to make the political processes change.

SPELLINGS: And in the era of local control, which we are in, where, you know, it was -- the easy way to do policy chance, the easiest way, is at the centralized level, obviously, federal or state, you know, mandates, et cetera -- that's why we got accountability and so forth. None of that crap would have passed through state legislatures because of the teacher union influence.

So the point is, we've got to get back to the day when people in this room stand up and say, I'm going to run for the school board; I'm a serious businessperson and I'm running to the school -- for the school board. We have left that level of politics to self-interested, you know, political careerists who want to use it as a stepping stone often or people who represent the interests of the systems, union organizers that serve on the neighboring school district board and on and on. We're not paying attention, and shame on us. That's what we get.

MEACHAM: Yes, ma'am.

QUESTIONER: Hi. I'm Nan Morrison. I run the Council for Economic Education. Hi, Joel. (Chuckles.)

KLEIN: Hi, Nan.

QUESTIONER: I want to come back to the Common Core, because I agree with you; I think it presents a huge opportunity for us because of some of the things you mentioned. There is a lot of opportunity to read critical texts through ELA and really have that broad. But they're not lock-and-load. And I'm wondering how much support we're actually giving to teachers to unlock and unpack those Common Core standards, because I see them, and I see the great ones, and I see them struggling with that.

And the follow-up to that is, Arne Duncan has a big discretionary budget. There are a lot of great recommendations in this report. If you had a dollar to spend tomorrow and Arne had that dollar, how should he allocate that? Should he put it toward helping teachers unpack the Common Core in creative and innovative ways? Should he put it towards the preservice teachers so they get content as well as pedagogy? Should (he ?) be putting it toward expanding the pilots that they're doing with Kahn in Palo Alto on blended learning? Where do you allocate that $1 because, at the end of day, we have to take action; we have to start putting the dollars that we do have in certain places and making a small number of bets.

KLEIN: All right, thanks.

SPELLINGS: Well, I'll start. I would -- I would target the Common Core effort because I do think that's the way out of the wilderness. But I wouldn't do it with -- today let's go try to do, you know, get to millions of teachers on how to -- how to do it.

We got to get, you know, very smart and strategic with places like the College Board and the big publishers, the big technology companies, to get some research-based tools that are scalable and systematic. And so this idea that we can expect every single teacher, master teacher or otherwise, many of whom are not capable of doing this in the first place, to sort of do the magic in their own classroom is just unreasonable, period, paragraph. And so, you know, we gotta get smarter about that and THEN deploy it. I mean, I wouldn't even talk to the teachers about the Common Core at the moment until we get our act together about what it is and how it works and, you know, materials around it and assessments built to it. Otherwise, I fear it's going to be one of those, "we tried that, and it did not work."

KLEIN: So I agree with that, although I do think we need to get ready for -- the concern you articulate is very powerful -- is if we don't put in the work to prepare teachers to make the transformation, it's going to be once again, you know, wonderful standards, no implementation.

If I had a dollar -- and this is a -- is a great way to phrase the question -- if I had a dollar to spend right now, I would probably spend it on the core recommendation in this report to facilitate increased choice because I think choice will lead to a merit-based and an innovation-driven system and that's what I think we need.

You know, for all the problems of postsecondary education in America -- I just read in a paper in today -- we're still perceived to have the greatest universities in the world here. And our university system grew up on a different model from our K-to-12 system. Our K-to-12 system was fundamentally a uniform system, nonchoice system, and our universities were very, very different. And people are still coming here to go to America's great universities, whereas our K-to-12 system, as Margaret started this discussion with, is in a very different place.

So I think, if I had only $1 to spend here, I would prioritize creating real choice-based systems in America, and I think that would drive a lot of the other reforms.

SPELLINGS: Yeah.

MEACHAM (?): (Yeah ?).

(Direction.)

QUESTIONER: Thank you. Allan Goodman at the Institute of International Education. Secretary Spellings, you did a lot working with the State Department during your time. What does this report tell you that the Ed Department and the State Department ought to do together?

SPELLINGS: Well, obviously, you know, this is the part of the equation that Joel and Jon talked about, and that is this whole global awareness and so forth and (on ?). So I think we have to be more demanding about what we ask our schools with respect to language. You know, I'm for bilingual education; I want everybody to be bilingual, right? And so we often think of that program as, let's take Spanish or other language teachers and -- language users and teach them to be proficient in English; what about English users being able to be proficient in other languages? And we need to invest around those things.

I think, you know, programs that can make this more real to school districts -- in Joel's discussion, he talked about the very difficult way of governance. So if you're, you know, a superintendent in a school district with three schools, study abroad is just too hard to untangle. So I think we need some models, we need some channels, and the State Department and the Department of Education ought to work on that.

I don't know what's happened since we left. We had the luxury of not having to worry about Common Core and things like that and were able to work on some of those efforts. And there are some great models, but I think it's -- in this time of so much change around technology and resources and so forth, I hope that that doesn't get lost in the -- in the mix.

MEACHAM: Ma'am?

QUESTIONER: Thank you. Evelyn Leopold, a journalist.

Madam Secretary, you touched on that -- on local school districts that have -- that are teaching "Earth is flat" theories, such as reflected in the Republican debate: Global warming doesn't exist; my god, Romney even speaks French; creationism is equal to who knows what. There are -- you know, there are a few others like that. And let's not even go into sex education.

How do you counter that? Because it's entered a national dialogue that seems to be very dangerous.

SPELLINGS: So if I could just start with saying, you know, this is local control, so you know, Democrats and teachers' unions and their friends who want Washington out of their business and decentralization and no accountability and local control -- that's it, baby. That -- and it has all sorts of permutations and manifestations.

The flip of that is -- I used to quote the Scarsdale mothers who -- you know, we don't want any assessment for our kids; they're already too smart; it is a waste of time -- so on and so forth -- so just sort of this crazy collection of odd points of view that are not lifted up enough.

And so, you know, that's why, you know, as I said, this shift that we're having in the debate around the role of the federal government and the -- and the role of state government and the role of the school board -- we're going to see more of that sort of thing. And it's clear to me that, you know, the day of singular mandates from Washington, like on accountability, annual assessment, of consequences, choice, all of the things that No Child Left Behind provided are dead and gone. I hate to say that.

And the focal point now is on local boards and state legislatures, and that's why it's so critical that, you know, if you care about those issues, you better go to your state board of education and pay attention.

MEACHAM: Now one more. Yes, sir. Last one.

QUESTIONER: I'm John Biggs. I'm the former chairman of TIAA-CREF but currently an adjunct at the Stern School at NYU, teach a course on financing retirement, which is another big issue.

But we have -- when we approach the state and local systems, I have a case study, and my main document I use is Joel Klein's wonderful op-ed piece two or three, four years ago, on the dysfunctional aspects of teachers' pension system. And there are, besides the appalling financial issues, which a lot of people are focused on, you highlighted all the educational problems that that kind of a system creates.

The mayor and the governor, since you retired, have all taken it on and seem to be -- have been defeated. Is there any hope we're going to get some improvement on that aspect?

KLEIN: I think it has to happen. Again, at some point -- everybody knows we're sitting on system in which we're continuing to incur obligation without solution. And you know, look, we can get through the next week, a month, a year or whatever, but for some reason -- and I don't understand -- when some kind of effort to patch this together, we see the dysfunctional Washington politics -- so we're in this argument -- should you tax millionaires or should you cut benefits or -- we're going to have to do all of these things, I mean. And it seems to me part of that is to restructure these back-end underfunded obligations in a meaningful way. And the mayor and the governor took it on. They got some change -- what was, as you know, a very, very tough political fight.

But I don't understand, when you look out -- I don't know if you saw the discussion this week with Secretary Geithner testifying -- if you look out, see the amount of red ink we've got out there, is it -- all that is, is saying to our kids, you know, basically, we're taking your money now and you're going to have to figure out how to pay for it later. It's not going to work.

So I don't -- other than to keep screaming this as loudly as I can scream it, I don't know what else to say. And it just seems to me that we're not getting -- we haven't, as a country, seriously got our head around the fact that we incur all these outsized obligations that are unfunded and that have to be funded. I mean, people legitimately worked. They got a pension. They're entitled to their pension. But if you look at California right now and they're dealing -- that's why the state universities and the K to 12 system are being starved, because they have all these outsized obligations.

So TIAA-CREF was a model, and I'll just make a prediction. I mean, they're always dangerous, because they're about the future. But I would say that that kind of model will come to the public sector. I have very little doubt about it. It has to.

SPELLINGS: Mmm hmm. (In agreement.)

MEACHAM: Mary, very quickly here, to close.

QUESTIONER: Hi. Amy Rosen --

MEACHAM: One sec. One sec. (Better ?).

QUESTIONER: Sorry. Amy Rosen, Network for Teaching Entrepreneurship. I just want to revisit content for a minute. If in fact the -- you know, the bulk ELA common core is about, you know, learning reading and mastering important concepts, then why can we -- and staying away from sort of what happens in a social studies core and all those kind of issues -- what about incenting the development of curriculum around issues that are dependent on our economic security?

I mean, we have now a trillion dollars of student loan debt, more than credit card debt. You know, the vast majority of kids in the American school system don't even know what compound interest is. I'm one of those adjuncts at Colombia Business School. I'll tell you that if not a majority, a number of my students don't know it, how to figure out compound interest.

And at the same time, we also know that every net new job in America is created from new businesses. In the organization I run, we have a huge demand from emerging economies, Brazil, China, Saudi Arabia. All they want to do is teach their kids an entrepreneurial mindset. All they want to do is teach them the basics of business and knowledge. Yet somehow in America, it's almost considered impolite to talk about money in school. So just your thoughts on how to drive that around economic security as well.

SPELLINGS: So one of the things that I do in my life after public service is work the U.S. Chamber of Commerce. And we have a thing called the Campaign for Free Enterprise and are working on some of those issues to make it socially acceptable and very polite to talk about, you know, we're a, you know, meritocracy and a capitalist society, yay us, you know, and talk about small business creation to our young people in ways that are meaningful. And there are great organizations that do it, like yours and, like, you know, nifty, and, like, yay, and, like, you know, the Extreme Entrepreneurship Tour and things like that, both at high school and college levels. But -- and I think it can be exciting for kids and provide some relevance that often is missing in our schools.

QUESTIONER: Yeah, but I mean, it's still sort of the isles of excellency, that do this as opposed to something that is actually mainstreamed or even a part of the mainstream -- (inaudible).

KLEIN: Right, this is part of a -- really, a larger problem. I mean, it's not just that we don't teach entrepreneuricism (sic) and financial literacy and stuff. We don't teach reading very well. And you know, you've got to get these all. It's not going to be, we should sort of switch -- I mean, nobody, least of all you, would suggest, well, we focus more on financial literacy and less on literacy.

And the other thing that strikes me, and maybe the right note to end on, though, is this interesting fight that Rahm Emanuel is having in Chicago right now.

But we -- it's not going to work to have an agrarian model of education where we go six and half hours a day, 180 days a year. I mean, in Korea, they don't do it this way.

And so you're absolutely right. We have to do more stuff. You're right about global literacy. But you know, I'm worrying about -- and when I was chancellor, I worried about just literacy, you know. I mean, basically, you know, learning to read -- you laugh, but it shocked me to think -- people ask me, what surprised me most about being chancellor? I used to go to public schools in this city and walk into a high school and ask a kid to read, and the kid could not read. I don't even mean comprehend; I mean read the words on a -- on a text. How the hell can a kid be in a school system for a decade and not read?

I mean, so, you know, this kid -- now, it may be that financial literacy will incentivize them, or entrepreneurism, or some of the kind of project-driven work that should happen. But it's just not going to win in the 21st century to have kids in high schools who can't read.

MEACHAM: The report is published today, "U.S. Education Reform and National Security." Thank you both. It was great.

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